According to Deloitte’s most recent London Office Crane Survey, the majority of London’s office towers do not fulfil future minimal requirements for energy performance certificates (EPCs).

Buildings with new leases must get a minimum EPC rating of E before they may be rented to new tenants, according to the Minimum Energy Efficiency Standards (MEES) laws, which have been in effect since 2018. The same policy will be applied to all current leases beginning in April 2023. Almost 10% of London’s office property now has an EPC rating of F or G, which means that renting out this space will be against the law starting in 2019.

According to the firm’s latest study, legislation that is presently making its way through parliament is anticipated to establish minimum criteria for energy performance in buildings, necessitating the renovation of 15 million square feet of office space in the capital.

Office buildings are expected to require an Energy Performance Certification (EPC) grade of at least Grade B starting in 2030. Grade E is the current minimal compliance level.

Increasing levels of corporate reporting transparency, stakeholder pressure, particularly pressure from occupiers, and stricter environmental requirements are clearly driving investor and developer emphasis, according to Philip Parnell, Deloitte’s real estate valuation and ESG head.

The estimations were part of Deloitte’s twice-yearly assessment of London office cranes, which also revealed that renovations made up the great bulk of new building projects in London over the previous six months.

According to the survey’s two-thirds of landlord and developer respondents, terms like “net zero” and the apparently endless list of ESG-related standards lack definition and clarity.

There is uncertainty on how to manage embodied and “new” carbon inside existing assets or new construction, as well as carbon related to building operation. With the implementation of a new operational energy rating system for commercial and industrial buildings larger than 1,000m2 this year, the government plans to solve the latter issue.